JCPenney has a long way to go.
The beleaguered retailer — whose CEO exited for home improvement chain Lowe’s this year — today posted another round of disappointing earnings and slashed its outlook for the remainder of the year.
The news sent the firms shares plunging double digits, and as of 2:45 p.m. ET, the stock remained in the red nearly 25 percent to $1.81 as investors signal they’d lost hope in the struggling chain’s ability to turn things around.
For the second quarter, ended Aug. 4, JCPenney widened its net loss to $101 million, or 32 cents per diluted share, from $48 million, or 15 cents per diluted share in the previous same quarter. On an adjusted basis, the firm’s net losses were $120 million, or 38 cents per diluted share, a far cry from the loss of 6 cents per share that analysts expected.
Sales also tumbled 7.5 percent to $2.8 billion, missing analysts’ bets of $2.9 billion, but the company blamed the decline on the 141 store closures it executed in 2017.
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Nevertheless, during a call with investors today, EVP and CFO Jeffrey Davis touted the company’s positive comparable sales growth of 0.3 percent as a highlight of the quarter.
“We had a strong start and finish to the quarter,” Davis said. “The month of May started off the quarter with a strong positive comp. However, as we’ve moved through to June, we experienced softer sales relative to high expectations of our sales plan.”
Davis said JCPenney decided “to take appropriate pricing actions on slow-moving excess seasonal inventory to prepare for the arrival of new fall and back-to-school apparel assortments.”
“Sales regained momentum as we progressed through July, and we delivered positive comps in the mid-single-digit range for the month,” he added.
In a bid to recover from losses, JCPenney has recently closed underperforming stores, upped its focus on omnichannel — offering services like buy online, pick up in store — and added top-tier brands such as Nike to its product mix.
Still, a turnaround is likely a ways away. JCPenney’s management said today it now expects fiscal 2018 comparable sales to be flat and adjusted losses per share in the range of 80 cents and $1. It previously called for comparable store sales to be flat to up to 2 percent and adjusted earnings per share as high as 13 cents.